Airlines in Australia and New Zealand suspended flights on Sunday as an ash cloud from an erupting volcano in southern Chile spread, threatening to damage engines.

Australia's national carrier, Qantas, said all of its flights in and out of Melbourne would be grounded.

It cancelled 22 flights to and from New Zealand and Tasmania, as well as eight flights within New Zealand's south island, as the cloud from Chile's erupting Cordon Caulle volcano spread across the atmosphere. About 8,000 people would be affected by the cancellations, a Qantas spokeswoman said.

Virgin Australia suspended 34 domestic flights and one international from Melbourne.

"We have been closely monitoring the situation all day," Virgin's Sean Donohue said in a statement. "Safety is always our number one priority."

Australian budget carrier Jetstar said it cancelled domestic flights to New Zealand's south island airports.

National carrier Air New Zealand did not cancel or delay any flights but has adjusted flight routes and altitudes to ensure aircraft remain clear of any ash, company spokeswoman Tracy Mills said. The drifting clouds can damage aeroplane engines.

New Zealand's Civil Aviation Authority said the ash plumes could affect cruising levels for both jet and turboprop aircraft at between 20,000 and 35,000 feet (6,000 and 10,600 metres).

The agency said the ash was likely to disrupt flights for the next week.

The volcano in Chile began erupting on 4 June. Flights in Chile, Argentina, Uruguay and Brazil were grounded for days following the eruption.

The flight warnings and disruptions come 14 months after air traffic was grounded across Europe after the eruption of Iceland's Eyjafjallajokull volcano.